We are using homologous recombination in mouse ES cells to address the above questions. The epsilon-y gene in mouse ES cells was targeted using a hyg/thymidine kinase cassette flanked by inverted loxP sites. We then used recombinase mediated cassette exchange to replace the cassette with epsilon-y genes in which the promoter GATA-1, TATA or CACCC motifs had been destroyed. Loss of the TATA box reduced transcription strongly. In contrast, the beta-globin CACCC substitution was a strong up-regulator of epsilon-y transcription, and resulted in recruitment of EKLF to the epsilon-y promoter, consistent with an important role for the CACCC element in stage specific globin gene expression. In order to assess the effect of alterations of epsilon-y transcription on the activity of other genes in the locus, we are re-creating the epsilon-y promoter mutations in mouse ES cells carrying two different globin locus alleles, D and S. Allelic discrimination taking advantage of polymorphisms characterizing these two locus will be used to determine expression and epigenetic modification of the beta-H1 and beta-major genes when epsilon-y is either upregulated or downregulated. In other experiments, a chromatin insulator was inserted in the mouse locus either between the LCR and downstream genes or between the embryonic and adult expressed genes. Together, these experiments are providing insights into the mechanisms underlying promoter specificity and LCR-globin gene interactions.